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Monday, February 25, 2013

How I would do aid for necessities

Before we get to that, taxes (in the United States of America, I rarely comment on the politics of countries not my own.) If you take away exemptions and loopholes and tax havens and credits and the downright screwy way we treat capital gains one fact becomes apparent about income tax: Everybody pays the same.

When all of the exploits and such are taken away and you're just left with, "This is the income tax upon which all of that other stuff is based," the fact of the matter is that everyone, from someone who earns no money to whoever earned the most (excluding capital gains because it's taxed a different way) everyone pays the same rate.

The differences come in because X% of 0 is 0. Doesn't really matter how big X is so long as it's finite. (if X is infinity then break out the calculus.) If someone earns zero dollars in the top bracket then that zero dollars is taxed at the same rate as someone who did earn money. It's just regardless of the rate the person who earns zero dollars in that range won't have to pay anything at that rate X% of zero is always zero.

Thus, at it's most basic, before we get into all the junk thrown on top, how you're taxed never changes regardless of how much or little you make. This kind of thing has a lot going for it. For one thing it means you don't ever run into a situation where earning more money results in you keeping less. For another thing it means that you can instantly shut down any argument on, "How come they only pay [whatever] in income taxes," by pointing out that the person asking the question payed the exact same amount on that level of their income. The envy that the rich have for the poor with respect to taxes becomes absurd once one realizes that they actually pay the same rate. (Except for capital gains, and loopholes, and tax havens, and various other ways the rich are able to pay less than the poor in taxes.)

I bring this up because were it up to me basic aid (as in on necessities, not disaster relief and such) would be treated the exact same way. Everyone gets the same.

One thing that this does is it eliminates layers upon layers of bureaucracy that are currently used to determine who is bad of enough to get help. Everyone gets the same so there's no need to check to see if you're worthy. You just have the food aid added to your food card every month, the other aid added to the other cards, and get a, "I've got health insurance through the government" card and so forth.

It also eliminates all of the work (paperwork, hoops to jump through, so on) that people need to do to get aid.

But another thing that it does is it puts a serious dent in the argument from envy. Yes, the "undeserving poor" (a category that doesn't exist except in the minds of certain people) might be getting this stuff for free without having to work for it, but so too are you.

And it eliminates a problem that people who are on the edges face, which is that there are places where making a little bit more money will mean you no longer qualify for aid, which will end up leaving you worse off. So it's in your best interest to not make more money. Now I've never met someone who decided not to make more money on those grounds, but I have met someone who was seriously screwed over because he made two dollars too much (two fracking dollars) to be considered poor enough to get aid, which ended up leaving him poorer than if he just hadn't worked that year and thus qualified for aid. If the aid never goes away then you never have that problem.

If we give everyone enough to be able to live with the basic necessities then we simplify the process of figuring out who to give to (everyone gets it), we eliminate the thresholds where incentives become perverse (if you make more you'll be off aid and thus worse off), we at the very least dent the argument from envy, we make it easier for people who need help to get it (because it comes to them automatically rather than depending on them doing thing after thing after thing to fight for it), and we loose very little.

The problem is, of course, that it costs more. Consider food stamps alone, you'd have more than six times as many people on them. Now some of the cost of that increase can be taken away by removing all of the work to determine who needs them, but I very much doubt it would be enough to take away all of that extra cost. For fully funding it I think new revenue would be needed, which works fine for me because I think our tax code could use some serious reworking. We need more tax brackets and the top marginal tax rate needs to be a lot higher. Also taxing capital gains at a lower rate than the money people actually had to work for is absurd.

So the plan would involve higher taxes for some, but it would also mean that no one would ever have to fear being without the basic necessities because everyone, even the ones paying the higher taxes, would be given enough to take care of those by the government. Whether or not someone like Bill Gates would use his foodstamps, were he given them, is an interesting question. But the point is that by giving them to everyone you make sure that everyone who needs them gets them (something our current system doesn't accomplish) and you make sure that there's never a perverse incentive to make less money in order to stay on aid.

The same with giving everyone medical insurance, or everyone money to be spent on housing. The same with all necessities.

13 comments:

In a perfect world, this is pretty much what I'd suggest, too. Yes, it's more expensive for some people, but they can't complain about "simply paying for those freeloaders and welfare queens" because they're being given the same aid.

The importance of not screwing people over by denying them still-needed aid because they worked an extra shift during the month you used to determine aid qualification (and the like) is a big one, too.

It's also about knowing. Not everyone who qualifies for aid knows that they do, and not everyone who knows that they do can expend the time and effort to get the aid, and so forth. But if everyone gets it then everyone who needs it gets it. It takes the onus off the people who are hurting.

Right now, and I'm not making this up, the number of hoops I have to jump through before they'll even consider whether I'm mentally disabled "enough" or not when the main problem said disability gives me is being unable to do things on my own initiative or follow through on orders without direct supervision is absurd and entirely of the form, "Here's something that you have to do on your own initiative without any supervision."

Great, why don't you tell someone in a wheelchair they have to walk up a flight of stairs to apply for aid while you're at it?

But what if it weren't that? What if it were there for everyone? Well in that case I'd probably have been in a position to work and pay taxes a decade ago. Giving me help, in particular medical help, could do away with the disability and make me into a taxpayer. Right now I'm costing them money (foodstamps) I could me making them money (taxes.)

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It would also in theory (but I'd want to take a wait and see approach in practice) eliminate the need for a minimum wage. If everyone has enough to live on by default, and enough to live on is keyed to cost of living so it keeps on being enough to live on as time goes on, then a job that only pays a dollar an hour isn't a problem because none of that dollar an hour is eaten up by necessary expenses.

With the necessities covered for everyone businesses can start paying people at just above zero. (In theory, like I said, I'd want to be sure before I eliminated the minimum wage.)

In a country as rich as America no one should go hungry. In a country as rich as America no one should be unable to afford clothes. In a country as rich as America no one should be homeless unless they want to be (some people do and I have nothing against that.) In a country as rich as America no one should go without medical help. In a country as rich as America no one should go without good education. And so on.

The best way to solve these problems isn't to demand that the hungry or the ill clothed or the homeless or the sick seek out help. It's to give that help to everyone, if they decide not to use it that's fine. If they decide to use it then that means it's working.

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Also, I think I said this in the Slacktivist comment that inspired this, those who coddle the rich (which... why? The rich can afford to buy coddlers, they don't need you to do it for free) make it seem like a more progressive income tax would take away the incentive for people to make more money and such.

Bullshit. There are things that take away the incentive to make more money but they aren't for the rich. They're for the poor. If you live on the edge of poverty it's better for you to be below the line and thus get aid than be above the line and not get it.

Trying to lift yourself out of poverty is a problem for that reason alone. Never mind all the other factors that align to keep you down.

Destroying the incentive to work for the money isn't something that taxes do to the rich, it's something that a lack of aid does to the poor. And yet, near as I can tell, most of the poor do try to get out of poverty in spite of the system urging them not to.

I have a feeling that what I describe would probably be denounced as socialism. But it's not. I'm not saying from each according to zir ability, to each according to zir need. (Which I'm pretty sure appears in the Bible well before Marx.) I'm saying to everyone according to the need of the least of these, from everyone according to a progressive tax code.

And then, once you've got everyone getting what they need from the government, capitalism can deal with what people want, which is where capitalism does its best*. Private fire departments result in houses burning down because a fire department is a need. Private toy companies result in Legos. Private yacht companies result in a thing that's basically a floating island with a swimming pool around the helicopter pad. Not sure how I feel about that last one, but if I ever become an ultra rich CEO my corporate headquarters is going to be a floating island just because.

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* Though it still needs to be regulated because abuses of workers, defective products, brain damaging toys, poisonous ingredients, and so forth. It really does race to the bottom if you don't have some sort of regulation propping it up.

I'm certainly in this general camp. My understanding is that in the UK more money is spent on trying to fight fraudulent welfare claims than is actually paid in welfare. If everyone should get health care (which is clearly a good thing for everybody), why shouldn't everyone get food?

Of course, if you give such aid in the right way, the people who don't need it can give it back - if it's some form of token rather than actual currency, they can simply not exchange them for food/whatever. (If they have to turn up somewhere in person to do this, people with enough money may well feel that it's not worth their time!)

And then, once you've got everyone getting what they need from the government, capitalism can deal with what people want, which is where capitalism does its best*.

Yes, exactly. I think it's a lot easier to be motivated to work for things you want, that will make you happy (and to do good work! To use your talents and benefit other people and create and...) If you have to work just to survive it's stressful and draining and you can't be anywhere near your best and at a certain point survival just seems too hard and unpleasant.

It is my impression that increasing automation and productivity and globalization and such are trending toward having a lot of "excess" labor by some people's reckoning. In that situation, with a system where people's basic needs are covered, we could use the labor we don't need to feed and clothe and house us to DO AWESOME SHIT. Colonies in Spaaaaace. The bestest, most interactive entertainment ever. Anything! And we won't because we want to think of some people as undeserving.

The thing that I see as a problem in this sort of discussion - always in the USA and often in the UK - is a failure to distinguish "everyone gets at least this much" from "everyone must have the same, and may not have anything better". (This is one of the lies told by Americans who don't want government-funded health care, for example.)

If "scroungers" or "bludgers" are really a problem, I think the answer is to add social inconveniences to the process of claiming, not to try to stop people from claiming. So you have to turn up in person, you can only spend the food-benefit at particular places, people slightly look down on you for using it, that sort of thing - which, unfortunately, makes life less pleasant for people who have no alternative, but encourages people who do have an alternative to make use of it.

I'm certainly in this general camp. My understanding is that in the UK more money is spent on trying to fight fraudulent welfare claims than is actually paid in welfare.

I suspect this is true here. As Chris said, a lot of people who should be eligible can't prove it, or will worry they can't prove it, or are barred or effectively barred because Ha Ha War on Drugs and/or Immigrants...

Not addressed in the post, but was addressed in me later trying to clarify some stuff in the thread that inspired this post is that I really think that, for example, foodstamps for everyone is better than money for everyone with which we expect each person to buy food.

So, other than things like medical insurance, which would be better served by just giving it to people (single payer) I'm picturing a more or less foodstamp system.

You get a card which is attached to an account (or, for simplicity given the multiple types of aid, one card attached to multiple accounts) each month X amount of money is put in the account. Like with foodstamps a given account can only be used to pay for whatever the aid is for.

The idea is everyone gets enough aid to live on, not everyone gets enough money to live on. I don't care how irresponsible you are with money I don't want you going hungry because the money you should have spent on food you spent on something else. Food aid is for food. Housing aid is for housing.

If people wanted to be frugal then, even if they made enough money that they don't need any aid, they'd use the aid to pay off the beginning of their expenses in a given area and then use their own money to pay off anything over the amount covered by aid.

If people didn't want to be then, probably, there should be some cap. What I said at the other place is if you've let six months worth of benefits pile up in your account, what are the odds that you'll need more than that in the next month? Once an account gets full the government wouldn't put more in until it was emptied some.

If people didn't want to be then, probably, there should be some cap. What I said at the other place is if you've let six months worth of benefits pile up in your account, what are the odds that you'll need more than that in the next month? Once an account gets full the government wouldn't put more in until it was emptied some.

I don't think this idea would work really well for healthcare, but I can see it working for other things.

BTW, there was a real life study in everyone gets a minimum income. Too bad Ottawa played hard to get with the data.

Wow that was odd. I just wrote an incredibly long comment but after I clicked submit my comment didn't show up. Grrrr... well I'm not writing all that over again. Regardless, just wanted to say fantastic blog!

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(Because while I'm not a starving artist, other than being sure of food everything else stands upon the edge of a knife as I am indeed that broke.)

Money, my constant nemesis

I have honestly lost track of how deep in debt I am

I had negative 8381.36 American dollars to my name at one point, but I'm another [unit of time] older and deeper in debt now. At some point I should count it all up, but that will be a depressing process indeed.